The problems of the .01%

Super-Rich Condo Owners Are Super-Mad About Creaky High-Rise

THOUGHTS AND PRAYERS


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They have filed a lawsuit complaining of “intolerable’ noise, scary cracks, and other problems.

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Early this summer, a contractor arrived at 432 Park Ave. on Billionaires’ Row in Manhattan to address pervasive water leaks at the mega high-rise. He began drilling through the concrete floor, allegedly without any guidance on whether the building’s developers had placed electrical wiring below. The contractor quickly discovered the answer. He cut into a cable, triggering an explosion that launched him several feet through the air, according to a lawsuit filed on behalf of tenants this week. It was allegedly the second explosion in just three years.The lawsuit, which seeks at least $125 million in damages, claims that residents have suffered one of the worst cases of “malfeasance in the development of a luxury condominium in the history of New York City.” The suit further alleges that developers have either tried to dodge accountability for 1,500 building defects or “negligently performed remediation efforts that at worst caused millions of additional dollars in costs.”

Many of the allegations appeared in a New York Times investigation published in February, which unleashed a torrent of schadenfreude in the article’s comments section. (“I sobbed uncontrollably reading this indescribably bleak tale of woe,” wrote one sardonic reader.) The Times also first reported this week’s lawsuit.

]Sarina Abramovich, who owns a unit in the building, said the chaos provoked infighting among residents. “Everybody hates each other here,” she previously told the Times. Abramovich and her husband had purchased a $17 million apartment in 2016, expecting white-glove treatment upon arrival. Instead, she complained, she was zipped up to her unit in a freight elevator, “surrounded by steel plates and plywood, with a hard-hat operator.”

According to court filings, construction at the 1,396-foot tower was not just delayed, but haphazardly completed. Ceilings are cracked, joints are misaligned, sliding doors don’t work, and “use of the trash chute is reported to sound ‘like a bomb.’”

Tenants also grumble about frequent creaks and vibrations. Filings allege that the cofounder of one of the developers, Richard Ressler, owns a unit in the building and has previously admitted that the noise issues are “‘intolerable,’ rendering it difficult to sleep during periods of even moderately inclement weather.”

Ressler’s firm, CIM, declined to comment. A spokesperson for the building’s sponsor group—of which CIM is a member—said that “each and every commitment and term contained in the 432 Park Offering Plan and Declaration has been honored.” He added that “the [homeowner's association] has restricted access to the property for the performance of remediation, which has delayed completion of certain work. In addition, the HOA and certain vocal residents misunderstand Sponsor’s obligations.”

The lawsuit is filed on behalf of 432 Park’s board and tenants collectively, meaning that individual owners could potentially still file their own legal claims. But the most striking allegations seem to affect the entire building.

Elevators, for instance, were programmed to slow down during periods of high winds. As a result, residents have been trapped inside for hours at a time. The sponsor group allegedly hired a consultant that recommended using duct tape to stabilize insecure materials. Meanwhile, the building holds an energy efficiency rating of a D, according to the lawsuit.

Some owners bought units under the belief that they would have a restaurant with a “Michelin-rated chef” that offered free breakfast, and a spending requirement of just $100 per month. Instead, they say, they no longer get their free breakfast, and they now have to spend $15,000 annually “to subsidize the restaurant’s operation.”

There have been other surprise charges. The condo’s property insurance premiums have allegedly skyrocketed by roughly 300%, seemingly in part due to construction problems, which has increased charges for individual owners.

According to the lawsuit, developers have stonewalled efforts to fix issues, and instead tried to impede residents’ takeover of the board, including by cancelling an election at the last minute. The residents ultimately took over in January.

An outside consultant hired by some residents found more than 1,000 defects in the building, which included over two dozen “life safety” issues. The suit alleges that developers claim to have completed more than 100 items on the list, but that they won’t specify which ones, or what they mean by “completed.”

As the suit progresses, some tenants are seeking to offload their properties, even at ambitious prices. The building’s penthouse is currently on the market for $169 million. The owner, a Saudi businessman named Fawaz Alhokair, paid$88 million for it five years ago. It will be a tricky sale to pull off.